HarborOne Bancorp(HONE) - 2024 Q3 - Quarterly Report

Financial Performance - Consolidated net income for the three months ended September 30, 2024, was $3.9 million, down from$ 8.4 million in the same period of 2023[199]. - The Bank's net income decreased by $4.2 million, or 46.0%, to$ 4.9 million for the three months ended September 30, 2024, compared to $9.1 million for the same period in 2023[217]. - For the nine months ended September 30, 2024, the Bank's net income decreased by$ 5.8 million, or 22.9%, to $19.6 million from$ 25.5 million in the prior year[218]. - Total noninterest income was $6.7 million for the three months ended September 30, 2024, compared to$ 6.5 million for the same period in 2023, representing an increase of $154,000 or 2.4%[221]. - Total noninterest income for the nine months ended September 30, 2024, was$ 13.1 million, down from $14.2 million in the prior year[232]. Asset and Loan Growth - Total assets increased by$ 108.1 million, or 1.9%, to $5.78 billion at September 30, 2024, from$ 5.67 billion at December 31, 2023[181]. - Net loans increased by $123.2 million, or 2.6%, to$ 4.83 billion at September 30, 2024, from $4.70 billion at December 31, 2023[185]. - Total loans reached$ 4,860,168 thousand, generating interest income of $64,047 thousand at an average yield of 5.24%, up from$ 4,706,326 thousand and $58,375 thousand at 4.92%[202]. - The total loan balance as of September 30, 2024, was$ 4.88 billion, compared to $4.75 billion at December 31, 2023[243]. - Total deposits increased by$ 148.8 million to $4.54 billion as of September 30, 2024, reflecting a 3.4% growth compared to December 31, 2023[193]. Credit Quality and Allowance for Credit Losses - The allowance for credit losses on loans increased by$ 6.0 million, or 12.6%, to $54.0 million at September 30, 2024[185]. - The allowance for credit losses to total loans ratio was 1.11% as of September 30, 2024, up from 1.01% at December 31, 2023[243]. - The Bank recorded a provision for credit losses of$ 5.9 million for the three months ended September 30, 2024, reflecting a specific reserve allocation for a single credit of $4.7 million[219]. - Net charge-offs totaled$ 182,000, or 0.02%, of average loans outstanding for the quarter ended September 30, 2024, compared to net recoveries of $18,000 for the same period in 2023[220]. - The total amount of loans to borrowers experiencing financial difficulty was$ 15.3 million as of September 30, 2024[247]. Interest Income and Expense - Interest and dividend income on a tax equivalent basis increased by $6.1 million, or 9.6%, to$ 69.5 million for the three months ended September 30, 2024, compared to $63.4 million for the same period in 2023[206]. - Interest expense increased by$ 5.0 million, or 15.8%, to $37.1 million for the three months ended September 30, 2024, from$ 32.1 million for the same period in 2023[208]. - Interest expense on deposits increased by $4.9 million, or 19.7%, reflecting deposit growth and a 45-basis-point increase in rates paid[208]. - The net interest margin on a full tax equivalent basis increased by 2 basis points to 2.36% for the three months ended September 30, 2024, from 2.34% for the same period in 2023[210]. - Net interest and dividend income increased by$ 1.0 million, or 3.2%, to $32.3 million for the three months ended September 30, 2024, compared to$ 31.3 million for the same period in 2023[210]. Deposits and Funding - Noninterest-bearing deposits rose by $53.4 million, or 8.1%, while regular savings deposits decreased by$ 339.1 million, or 26.8%[193]. - Brokered deposits increased by $47.1 million, or 14.4%, indicating a strategic move to seek additional funding[193]. - The company reported$ 373.7 million in brokered deposits as of September 30, 2024, to supplement core deposit fluctuations[266]. - The company has additional borrowing capacity of $830.3 million from the FHLB and$ 419.2 million from the FRBB based on collateral pledged[265]. - The company borrowed $175 million for a one-year term under the BTFP during the first quarter of 2024[196]. Regulatory Capital and Liquidity - Total stockholders' equity was$ 584.2 million, a slight increase of 0.1% from $583.8 million at December 31, 2023[197]. - The tangible-common-equity-to-tangible-assets ratio was 9.17% as of September 30, 2024, consistent with the previous year[198]. - The company exceeded all regulatory capital requirements and is considered "well capitalized" under regulatory guidelines as of September 30, 2024[269]. - As of September 30, 2024, the company has immediate liquid resources in cash and cash equivalents amounting to$ 224.3 million, primarily on deposit with the FRBB[265]. - The company’s liquidity risk management process aims to provide continuous access to sufficient, reasonably priced funds[264]. Noninterest Expense and Operational Efficiency - Total noninterest expense was $26.8 million for the three months ended September 30, 2024, reflecting a 1.8% increase from$ 26.3 million in the prior year[226]. - Compensation and benefits decreased by 2.0% to $14.9 million for the three months ended September 30, 2024, compared to$ 15.2 million in the prior year[226]. - Noninterest expense for the three months ended September 30, 2024, was $5.6 million, a 2% increase from$ 5.5 million in the prior year[238]. - The bank recorded an intersegment loss of $1.1 million for the nine months ended September 30, 2024, compared to a loss of$ 153,000 in the prior year[222]. - The loss on sale of securities was realized on the sale of $17.5 million of available-for-sale securities with a weighted average book yield of 2.84%[225]. Mortgage and Loan Segment Performance - The bank purchased$ 86.8 million of residential mortgage loans from HarborOne Mortgage during the nine months ended September 30, 2024, down from $132.4 million in the prior year[224]. - Gain on sale of mortgage loans for the three months ended September 30, 2024, was$ 3.8 million, a decrease of 25.6% from $5.1 million in the prior year[232]. - The bank's mortgage segment recorded a net loss of$ 1.1 million for the three and nine months ended September 30, 2024, compared to a net loss of $138,000 in the prior year[231]. - The change in mortgage servicing rights fair value declined by$ 3.3 million for the three months ended September 30, 2024, reflecting the decrease in benchmark residential rates[234]. - Conventional loans accounted for 66.1% of total loans in Q3 2024, up from 62.9% in Q3 2023[236].